UPDATE 1-Raytheon to pay fine for U.S. export control violations

Reuters Staff

3 Min Read

* State Dept review showed “recurring corporate-wide weakness”

* Raytheon says working with govt to achieve full compliance

By Andrea Shalal-Esa

WASHINGTON, April 30 (Reuters) - Raytheon Co, one of the largest U.S. weapons makers, has agreed to pay $8 million in civil penalties to resolve hundreds of alleged violations of U.S. export control laws over the past decade, the U.S. State Department said on Tuesday.

The State Department said it reached the agreement with Massachusetts-based Raytheon after an extensive review showed the company’s “numerous violations demonstrated a recurring, corporate-wide weakness” in maintaining effective compliance controls.

Under the terms of the agreement, Raytheon neither admitted nor denied the allegations. However, the company voluntarily reported many -- if not most -- of the alleged violations to the government.

Half of the fine will be suspended on the condition that Raytheon will use the money for government-approved remedial compliance measures, including increased training and oversight. The company also agreed to hire an independent special compliance official to oversee the four-year consent decree.

Raytheon, which prides itself on generating more revenues overseas than its rivals, expects international sales to account for 27 percent to 29 percent of its total revenue in 2013.

The company said in a statement it would continue to work closely with the State Department “to achieve its goal of full compliance and industry-leading practices.”

The department said it would not debar Raytheon from further exports since the company voluntarily disclosed nearly all the violations covered by the settlement over the past decade.

Many of the violations involved the manufacture of hardware by foreign partners in excess of approved amounts, and the failure of Raytheon employees to submit documents in a timely manner, or with necessary amendments, the department said. Some violations related to classified material.

Violations continued to occur, even after Raytheon pledged to increase training, adopt a more robust information technology system, and hire more experienced personnel, it said.

Last year, United Technologies Corp, another large U.S. exporter, agreed to pay $75 million in fines for export violations, including the sale of software later used by China to develop its first modern military attack helicopter.